UK construction output grew by 5.4% in 1Q14

The UK’s Office of National Statistics (ONS) estimates that construction output increased by 5.4% y/y or £1.5 billion on a seasonally adjusted basis in 1Q14. New work accounts for approximately £1 billion of this, with repair and maintenance accounting for the remaining £0.5 billion. When compared to 4Q13, construction output grew by around 0.6% (£180 million), with new work rising by 0.9% q/q and repair and maintenance by 0.2% q/q. In March 2014 alone, construction output is estimated at £9.4 billion, representing a decline of 1% m/m following output worth £9.5 billion in February 2014.

The latest Markit/CIPS UK Construction PMI® also brought relatively promising news for the UK’s construction sector. In April 2014, total construction activity remained strong, with growth across the residential sector, commercial activity and civil engineering. However, the overall growth rate was not as high as it was in March 2014 and the lowest it has been in six months. On the plus side, housing activity growth has almost reached a 10-year high. The last 15 months represent the longest period of growth in the area since 2006/2007. In addition, new business for construction companies continues to grow and there was a rise in construction sector employment in April, according to the survey data.

“While the rate of growth slowed slightly in April, the construction sector is still experiencing a remarkably strong and consistent period of expansion. Positive news abounds as housing activity reached a near ten-year high and the sector as a whole benefitted from the sharpest rise in new business since January this year. This, alongside improving economic conditions, continued to drive strong job creation, giving further cause for optimism about the future,” said David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply.